The lifting of the ban paves the way for nearly $1 billion of U.S. poultry to enter China each year as Chinese consumers look for alternatives to pork in response to the country’s pig population being depleted by the outbreak of African Swine Flu. Chicken is often used as a pork substitute.
“We are not taking any purchases from China until we have label approval from the USDA,” Chad Martin, group president, poultry at Tyson Foods, told FOX Business, adding that his company is “seeing significant interest from China in purchasing poultry.”
Martin says Tyson is “well-positioned to meet the needs of the Chinese market” due to its diverse portfolio of protein products, extensive in-country presence, and expertise of its local marketing and innovation teams which gives the company “a strong grasp of the latest trends and consumer insights in China.”
While Tyson’s first exports to China will likely include chicken paws, wingtips, leg quarters and whole legs, Martin says demand will ultimately determine what products are shipped.
Shares of Tyson Foods got a pop on the news after receiving regulatory approval to begin exporting poultry from all 36 of its U.S. plants to China beginning early next year.
Wall Street analysts are overwhelmingly bullish on Tyson Foods with 12 of 14 analysts surveyed by Refinitiv assigning a “buy” rating with just two saying to “hold.” Their average 12-month price target is 98.38 – 9.2 percent above where shares are currently trading.
Tyson Foods is up 68.4 percent this year compared to the S&P 500’s 27.4 percent gain.